Regulatory: Making up the rules while the game is being played—FCC v. Fox

At the beginning of the 2012 National Football League (NFL) season the officials were on strike, and the NFL decided to use a group of replacement referees, who applied the rules of the game inconsistently or not at all. This culminated in the infamous Green Bay Packers and Seattle Seahawks game that was decided by a questionable call by the replacement refs. One would hope government regulation would be immune to similar problems, but apparently it is not. That is the only conclusion to be drawn in the case of Federal Communications Commission (FCC) v. Fox Televisions Stations that was decided June 21, 2012.

Regulatory agencies implement policies and objectives set by Congress in basic legislation. They develop and implement rules and regulations to govern the areas assigned to them by Congress, according to the provisions of the federal Administrative Procedures Act (APA). The rule-making procedure generally involves the agency issuing a general notice of proposed rulemaking, giving interested parties a chance to comment, publication of a final rule, giving the public the right to petition to amend the proposed rule, then ultimately issuing a final rule. This provides an opportunity for regulated parties to participate in the rulemaking process while giving them notice of rules that are issuing.

In some cases, regulatory agencies may develop rules or procedures outside the APA process. For example, agencies may release policy statements which may have an effect similar to that of a formal rule. The question then is what happens when an agency fails to go through the rule-making procedure and instead issues and enforces policy statements, particularly as related to past actions of regulated parties.

The Supreme Court addressed this issue in Fox, which dealt with standards regarding obscene content. In the 1978 case of FCC v. Pacifica Foundation, the Supreme Court upheld FCC enforcement of these standards, holding that they did not violate the First Amendment because broadcasting receives the most limited First Amendment protection due to its pervasive presence in the lives of Americans. The court did not clarify whether an occasional expletive would be subject to FCC action.

The Pacifica decision led to a period of uncertainty within the FCC and among regulated broadcasters. From 1978 to 1987 the FCC brought no enforcement actions based on the statutory proscription of obscene, indecent, or profane materials. During this period of time, the FCC distinguished between repetitive occurrence of indecent words and isolated or occasional expletives.

In 2001 the FCC, having decided it was applying the Pacifica standard too narrowly, issued a policy statement which presented a framework for what would be considered offensive. Even after the 2001 policy statement, however, fleeting expletives were not considered actionable.

Fox dealt with three incidents involving FCC enforcement actions. The first was a statement by Cher at the 2002 Billboard Music Awards which included a single expletive, but significantly it was the “F” word. The second was a statement by Nicole Richie at the 2003 Billboard Music Awards in which she one-upped Cher by using both the “F” and “S” words. The third incident involved seven seconds of partial nudity on a 2003 episode of the TV show NYPD Blue.

Following these incidents, the FCC issued its Golden Globes order indicating that even fleeting expletives might be actionable and initiated enforcement actions against Fox and ABC. In doing so, the FCC started enforcement actions based on a policy statement issued after the events in question. Fox and ABC challenged the FCC enforcement actions.

The Supreme Court reviewed and found the FCC actions and standards unconstitutionally vague, finding that the void for vagueness doctrine addresses two connected but discrete concerns. First, regulated parties should know what is required of them so they may act accordingly. Second, precision and guidance are necessary so that those enforcing the law do not act in an arbitrary or discriminatory way. Bringing enforcement actions based on policies developed after the fact violates the due process clause of the Fifth Amendment. The court held that “[a] fundamental principle in our legal system is that laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”

The FCC had gone for years using vague policy statements on the indecency issue. It was only after three incidents had occurred that it issued a more detailed policy statement. Since the FCC failed to give broadcasters fair advance notice that fleeting expletives and momentary nudity could be found actionably indecent, the FCC action was held unconstitutionally vague. The FCC’s attempt at a mid-game rule change was blocked by the Supreme Court.

Contributing Author

Craig Metcalf

Craig Metcalf is a Shareholder with Kirton McConkie. His practice emphasizes intellectual property and appeals as well as mediation and arbitration. He can be reached...